Loss events in practice: the tier is computed, the month is always filed

Recording the event

• Four dates. When the event happened, when it was discovered, when it was booked in the accounts and when it was reported. The accounting date is the one the loss data set reads.
• Business line, cause and Basel event type. One of the seven Level-1 types, EL01 to EL07.
• Near miss. An event that could have caused a loss but did not is recorded and marked as such; it carries the same lessons.
• A linked risk. Every loss event is tied to a risk in the entity's register, so the heat map reflects loss experience.
• Amounts in the original currency. Gross, recovered and net, in the currency the loss arose in — digital assets in their own unit — converted to Thai baht under the group's FX policy. Net is computed. Every change to the position is appended to a valuation history; nothing is overwritten.

The materiality tier: computed, never chosen

The group sets its materiality thresholds once, at the root, and they apply to every entity beneath it, so a tier means the same thing across the group. The system computes each event's tier from its latest position against those thresholds and routes it to the people that tier calls for — tier 1 to the Risk Champion, tier 2 along the route the group sets, tier 3 to the risk management committee and the board. There is no field to choose a tier.

When a recovery or a revaluation moves the position across a threshold, the tier is recomputed, the event is routed to the new tier's recipients, a threshold review is opened in the action register, and both the earlier and the new tier stay in the event's history.

Validation, visibility and the monthly report

• Validated inside the entity. A new event is a draft, then submitted to risk management. The entity's own Entity Risk Manager validates it into the loss data set, rejects it as not an operational risk event with the reason, or returns it for more information. The validator is stamped. An event cannot be validated while the evidence label of its amounts is unknown.
• Reported, then visible. A parent reads a subsidiary's event only once it has been validated; drafts and events under review belong to the entity working on them. An event marked sensitive is seen along the reporting line only, never sideways.
• Every month is filed. Each entity files a loss report for every month, with a formal nil return when there were no losses, so silence is never mistaken for a clean month. The report gathers every event reported by the month end, except rejected ones, with its status and its movement in the month.
• The period freezes. When the RMC accepts the month, its figures no longer change, and the month enters the loss data set and the loss report pack.

Where it usually breaks

• Amounts overwritten. The gross figure is corrected in place; the recovery replaces the original number. Six months later nobody can say what was first reported or when the position changed.
• A chosen tier. The person entering the event decides how material it is. Tier 3 events have a way of becoming tier 2.
• No nil return. The month-end report lists the entities that filed something. The ones that filed nothing are indistinguishable from the ones that had nothing.
• The continuity incident never becomes a loss event. The operations team closes the incident in its own tool and the risk desk learns of the loss at quarter end, if at all.

In Risk Core

Risk Core — powered by Qirin X · ComplyWise. ERM Core records loss events as set out above: an event code issued by the system (LE-2026-0001), the reporter stamped, four dates, Basel event type, near-miss flag and linked risk; gross, recovered and net in the original currency with conversion to baht under the FX policy and an append-only valuation history; a materiality tier computed from the group's thresholds with routing by tier; validation, rejection or return by the entity's own Entity Risk Manager; a monthly loss report with a formal nil return that freezes when the RMC accepts it; and a loss report pack and group monthly report assembled from what each entity reported up.

The continuity link is built in: when a BCP Core incident is closed, the system creates a draft loss event in ERM Core, without amounts, for the Entity Risk Manager to complete and validate. Nothing is re-keyed between the two modules.

Platform summary and the ComplyWise services around it: Risk Core. Product documentation: Loss Event, Materiality tiers and Monthly loss report and nil return on Risk Core Docs.

The series

Six articles, one stage at a time. Each one explains the framework first and ends with how Risk Core implements it.

1. 1

   Enterprise risk management in practice: the six-stage risk life cycle

   ERM in practice · 1 of 6 · October 2026

2. 2

   RCSA in practice: a risk score nobody can type

   ERM in practice · 2 of 6 · October 2026

3. 3

   Loss events in practice: the tier is computed, the month is always filed

   ERM in practice · 3 of 6 · October 2026

4. 4

   Key risk indicators in practice: three bands, versioned thresholds, every Red is an action

   ERM in practice · 4 of 6 · October 2026

5. 5

   From the business impact analysis to the continuity plan: how a recovery time becomes a call-tree order

   ERM in practice · 5 of 6 · October 2026

6. 6

   Group risk governance in practice: each company runs its own, the parent reads up

   ERM in practice · 6 of 6 · October 2026

Frequently asked questions

What are the seven Basel operational risk event types?

Internal fraud; external fraud; employment practices and workplace safety; clients, products and business practices; damage to physical assets; business disruption and system failures; and execution, delivery and process management. They come from the Basel II framework and are still the standard classification for operational loss events.

What is a materiality tier for a loss event?

A level that says how significant the loss is and who must see it, derived by comparing the event's current net position with thresholds the group has set. When the tier is computed from the thresholds rather than chosen, every entity in the group grades losses the same way.

Why file a nil return for a month with no losses?

So that a month nobody filed cannot be mistaken for a month with no losses. A nil return is a positive statement by the entity's risk manager that the month was reviewed and nothing was found; its absence is visible on the dashboard as not filed.

Should near misses be recorded as loss events?

Yes, marked as near misses. They carry no amount but the same cause and event type, and they show where a control held only just. Many supervisors expect them in the loss data set.

Sources

1. Risk Core Docs — Loss Event: recording, amounts and FX, materiality tiers, validation, monthly loss report
2. Risk Core Docs — Materiality tiers: computed from the group's thresholds; routing; restatements
3. Risk Core Docs — Validation and visibility: the loss event statuses; Reported-Then-Visible
4. Risk Core Docs — Monthly loss report and nil return: the period freezes on RMC acceptance
5. Risk Core Docs — Product rules: the seven rules Risk Core enforces in the database
6. Risk Core Docs — Standards mapping: COSO ERM (2017), ISO 22301:2019 and the Basel event types
7. Basel Committee — Basel II: International Convergence of Capital Measurement and Capital Standards, comprehensive version (June 2006), Annex 9: detailed loss event type classification

Accessed and last reviewed 21 October 2026. Each figure and table cell is traced to a source above.